Outsourcing is a business practice in which a company (your company) hires a third-party to handle operations or provide services for the company.
Outsourcing business functions is sometimes called contracting out or business process outsourcing.
Companies often outsource as a way to:
- lower costs
- improve efficiencies
- speed up a process
- remove stress
- gain an advantage over competitors
Companies that decide to outsource rely on the third-party providers’ expertise in performing the outsourced tasks in order to gain the benefits. The basic principle is to partner with a third-party provider that has a focus and strength with a particular task and is able to do it better, faster and cheaper than the company seeking an outsourcing partner could.
The most frequently outsourced business functions are:
- IT Support
- Software Development
- Social Media Management
- Cleaning Management
Many companies resort to outsourcing strategies in order to purchase cheaper services and to be able to focus more on their own competencies.
As a manager you should always first check that the benefits outweigh the disadvantages for your company before opting for outsourcing.
We recommend sourcing a local service provider for the best results.
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